European Antitrust Case Against Google Moves Toward Settlement

Google seems to have stared down antitrust concerns both at home and abroad today with an assist from its executive chairman, Eric Schmidt.

The European Commission has given the company a new deadline of January 2013, said EC competition commissioner Joaquin Almunia. At that point, Google is supposed to produce a “detailed commitment text.”

Almunia said his organization has “substantially reduced our differences” with Google since he first opened the door to preliminary settlement talks earlier this year.

That’s a significant change from expectations that Almunia might litigate against Google, given that he has relatively more power to do so under European laws than the U.S. Federal Trade Commission, which is in the process of backing down from the brink of a formal complaint, as well.

Almunia’s new statement comes on the heels of Schmidt visiting him in person in Brussels today.

The FTC was also expected to announce a settlement agreement with Google over search, search advertising and standards-essential patents early this week. That hasn’t happened yet, but will likely take place tomorrow.

Both the FTC and the EC have pulled back on broader claims against Google. The FTC agreement this week is expected to cover issues such as scraping content to display in search results, something Google had already pulled back on. According to sources, as well as many reports, the FTC is expected to delve more deeply into the more knotty issue of search bias, where competitors charge that Google preferences its own services over those of competitors.

Almunia, however, made sure to point to the search result display issue today, listing it first among his concerns, as he has before.

After meeting Eric Schmidt, executive chairman of Google, today in Brussels, I have decided to continue with the process towards reaching an agreement based on Article 9 of the EU Antitrust regulation.

Since our preliminary talks with Google started in July, we have substantially reduced our differences regarding possible ways to address each of the four competition concerns expressed by the Commission.

These concerns relate to:

- the way in which Google’s vertical search services are displayed within general search results as compared to services of competitors;

- the way Google may use and display third party content on its vertical search services;

- exclusivity agreements for the delivery of Google search advertisements on other websites; and

- restrictions in the portability of AdWords advertising campaigns.

On the basis of the progress made, I now expect Google to come forward with a detailed commitment text in January 2013.

We will then prepare a Preliminary Assessment formally setting out our concerns. The Preliminary Assessment would serve as a basis for Google to present formal commitments which would then be market-tested, leading to a possible decision with binding commitments.

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